What goes wrong when things go wrong? What follows may not be suitable for younger audiences: post-mortems of several IT projects that turned ugly.

Chapter One: Don't Guess for Success

The lack of clear requirements at the outset of a new IT project or consulting partnership is the number one killer of initiatives within large organizations. Project charter processes are critical, whether the project is to be handled in-house or by contractors.

IBM’s Team for Texas Consolidation

When data center consolidation is done right, it can save a bundle and bump up performance in the process. When outsourcing is done right, it can do the same. When both are done wrong at the same time, you have an unmitigated disaster the size of the Lone Star State.

At the end of 2008, the State of Texas reported a colossal failure in a years-long project to consolidate 27 data centers across the state. When Texas shook hands with IBM in 2007, the state agreed to pay Big Blue to lead up the "Team for Texas." The team promised to reduce the number of servers across the state from 5,300 to 1,300 within three years and save the state $25 million by year two of the contract. The idea was to rapidly move from a highly distributed environment where individual agencies ran their own data centers to a more consolidated approach.

When the state shopped for a contractor to consolidate data centers, it chose IBM over shortlisted Northrup-Grumman, the incumbent data center operator at the time. Northrup-Grumman’s estimate came in $358 million over IBM's because the company believed a slower approach to consolidation was necessary due to geographic restraints and an eclectic collection of systems and applications across agencies.

By November 2008 it was clear that Texas was regretting its decision. IBM sent Texas a letter on Nov. 3 that stated it would need to rework its infrastructure funding to replace legacy systems that were hampering consolidation efforts. The project had only saved the state $500,000 so far and agencies were giving IBM failing grades across the board for service and support. Governor Rick Perry told IBM that it was in danger of losing the contract if it didn’t fix dangerous disaster recovery backup oversights and breaches in contract that were caught by state officials after a system failure.

The state of the contract is still in flux. Observers believe there will be a finger-pointing match between the state, which had out-of-reach expectations for the project timeline, and IBM, which oversold its ability to accomplish unrealistic goals.

Lessons Learned: Sometimes the cheapest proposal is not necessarily the best proposal. Project managers must double and triple check cost estimates to ensure they’re based on realistic assumptions.

U.S. 2010 Census Handheld Rollout

The scourge of scope creep is a classic project management stumbling block that can waste money and even destroy promising initiatives.

The case of the U.S. 2020 Census modernization project offers a classic example. When the U.S. Census unveiled the project, the idea was to arm its census takers in the field with high-tech handheld devices that could directly beam population information to HQ as employees dug it up.

Census officials inked a $600 million deal with Harris Corporation to build 500,000 devices, but they still weren’t sure which features they wanted included in the units. What they did know was that this go-around at the census would cost at least $10 billion in total. Though there were no detailed projections, they assured the public that the handhelds were sure to save the department money.

Two years later, the handheld project was in shambles. In April, the bureau chief sent a press release announcing that it was significantly reducing the role of the handhelds in the 2010 Census efforts. After laying out hundreds of millions in taxpayer dollars, the census takers were for the most part going back to the old-fashioned paper method.

According to a report by the Government Accountability Office in July 2008, the units that were tested out in the field in 2007 were regularly experiencing problems with "transmission, the device freezing, mapspotting (collecting mapping coordinates), and difficulties working with large blocks."

Even more troubling, Harris reported that since it signed on with the Census Bureau, it received over 400 change requests to project requirements. Part of the reason the bureau scrapped the project was the subsequent cost overruns that were going to be necessary to get the full project off the ground given the midstream requirements changes.

What’s worse, even as census enumerators were relegated back to the paper age, the total cost of census estimates rose by the billions. The current estimate is somewhere around $14.5 billion.

Lessons Learned: A clear set of requirements and a well-governed change-management process are the critical ingredients to project success.